Transcript
Kaeden Thomas: Welcome to The Full Extent podcast. My name is Kaeden Thomas. I’m your host, and we’re joined today by Alejandro Velasco, who’s an associate professor at the New York University. He is also an executive editor at NACLA and the author of “Barrio Rising: Urban Popular Politics in the Making of Modern Venezuela.”
Kaeden Thomas: We’re happy to have you on.
Alejandro Velasco: Thanks so much. I appreciate it.
Kaeden Thomas: All right, all right. So could I give a brief overview, but could you please introduce yourself and give a bit of your background?
Alejandro Velasco: Yeah, sure. So my name is Alejandro. I’m faculty member at NYU, where I’m an historian of modern Latin America, and I’ve been here for 19 years at NYU, much of my research, which also, of course, includes not just my writing, but also my teaching, is in the areas of social movements and urban politics and democracy, especially in the 20th century Latin America, and much more specifically, Venezuela, which is also where I’m from. Originally, I was born and raised in Venezuela, and my academic research also focuses on urban social movements in Latin Venezuela in the 20th century. And what I have tended to do a lot of as part of my professional life is also commenting on Venezuela and politics, in particular, the various iterations of crisis that Venezuela has undergone over the last three decades.
Kaeden Thomas: Gotcha. So let’s, let’s dive right into it. So Venezuela has virtually disappeared from the headlines since the beginning of the Iran war. That has taken precedence. And so what has been going on in Venezuela? Could you give us, yeah, brief overview of of what’s been going on since the removal of Maduro?
Alejandro Velasco: Well, a lot and not a lot at the same time, certainly over the first two months. And it’s always hard for me, as I hear that said out loud, to remember it’s only been two and a half months, well, I guess three, almost now, since Maduro was, you know, was deposed through this commando raid from by the United States, which is not a lot of time, as you know the crow flies, but it is actually a significant amount of time thinking about all that has happened, and yet, at the same time, things feel somewhat similar, especially if you just focus on the surface of what’s happened since Jan. 3, many of the same players that were in Maduro’s government remain in power in Venezuela today, including his vice president, who is now President Delcy Rodríguez, her brother Jorge Rodríguez, who was the president of the National Assembly and is again president of the National Assembly, the interior minister the Diosdado Cabello, a very powerful figure, not only in around Maduro, but in the broader Chavista movement that they represent, the longtime defense minister for Maduro, Vladimir Padrino López, he was just recently, and by that, I mean last week. He just stepped down last week after 10 years, actually 11 years in office. So that’s a big move that again, in the first couple of months, the fact that he was still in in his position and suggested not a lot of change. So again, if you look at the kind of surface, things seem kind of similar. But then if you look at and here, both discursively and in terms of policies, lots of changes have happened in Venezuela over the last three months. The biggest one, of course, is that the relationship with the United States is now tight in ways that before it was not only not tight, but non existent, right? And so we’ve had an A new hydrocarbons law passed very quickly in order to allow for US oil investment in Venezuela. We’ve had some sanctions by the US of the oil industry lifted, which had been really ruinous for for Venezuela since they were imposed in 2017 and later 2019 we’ve had, you know, everyone from the secretary of energy to the director of the CIA be visit Venezuela and with red carpet treatment, which you know, previously unthinkable, certainly before Jan. 3, we’ve also in Venezuela itself, had the release of hundreds upon hundreds of political prisoners. Hundreds still remain in jail. But also, there was an amnesty law that passed with lots of critiques from civil society sectors about its scope and about its origins, but nevertheless, these are signs of some measure of transition. And then there’s been. A discursive shift right where before, you know, people certainly around Maduro, but more broadly, in the government would not go a day without sounding some anti-imperialist or anti-American banner. We’ve not heard any of that in the past three months. And so you know, on the surface or feels like there’s not a lot of change, but there are, in fact, significant changes that are happening below the surface, right?
Kaeden Thomas: And so it’s been shaken up a bit, right? And you mentioned Delcy Rodríguez and her administration that has essentially stepped up into into office. And you know, the the rule, or the sort of formalities within Venezuela is that the vice president, if there’s an absence of the of the president, the vice president will step up, and then they’ll hold elections within 30 days, right? What has she provided reasoning for not having done that?
Alejandro Velasco: No, and I am of the mind, although I should stress that there’s no proof behind this that I can point to with certainty, but there seems to be a lot of contextual evidence suggesting that Maduro is ouster was not entirely unknown by people around him, including, of course, Delcy Rodríguez, Jorge Rodríguez, Diosdado Cabello and others, seems to be seems to have happened in a much more concerted way, including perhaps some figures within his his administration, which is to say that things happened very quickly to instantiate a very stable transition, which is ultimately what the Trump administration signaled was its primary priority. With this operation to generate stability. They have this three part plan for Venezuela, stability, development transition with no real timeline attached to any one of those stages, but stability being the major one. What we saw not only in the weeks, but really in the days and sometimes the hours after Maduro’s ouster was all of the institutions of the state, including the National Assembly, including the courts, mobilizing very quickly to legitimize the transition of power right. And so the Supreme Court, on Sunday, Jan. 4, issued a ruling saying not only that Maduro was no longer in office because he had been kidnapped, but he was unlikely to return, which then opened the door for Delcy Rodríguez to be sworn into office. But it also said, in the context of this moment of transition that elections did not need to be called within the specified 30 day period that the Constitution allows. Right? So, yes, in one sense, we’re living in this kind of, you know, supra-constitutional moment. But that’s not unheralded in Venezuela, where where certainly the government has long bent the rules in its favor. And this is one of those instances. What’s, of course, interesting is that the United States has not been demanding the application of this 30-day timetable, right? They are perfectly content with having Delcy Rodríguez lead this moment of trans — not even transition of stability, that, of course, remains a major question.
Kaeden Thomas: Right. So for the US government, it’s not of utmost importance that we see this democratic transition as soon as possible. So you say that the ouster was some sort of maybe third party individual and and Delcy Rodríguez and her administration had some, maybe some prior knowledge to this. Do you think it’s like the the ousting of Maduro is something monolithic, that, that there were a lot of people involved, or because you said, you know, it was judicially approved, her government step up, right? And so, is this bigger than we thought?
Alejandro Velasco: That, of course, as even the prior initial claim is speculative, but my own sense again, just reading into the. Signs of speculation is that it’s not likely the case that a very wide circle of people were in the know that Jan. 3 was going to go down the way that it did. I do think that the key players had us had an understanding and in part, why they’re key players, because they each have very significant control over specific areas of remit. So Jorge Rodríguez, as I said, controls the National Assembly, which is to say, controls the political party the best he controls you know, has access to the oil company as well as economic figures. Diosdado Cabello controls the paramilitaries, the police and the security forces and the intelligence agencies. And for until last week, the Defense Minister Vladimir Padrino López controlled, of course, the military to the extent that they could issue orders right to safeguard this moment of post-Maduro transition, or to a post-Maduro government. That’s all that was really required in terms of people who were in the now. For them, the big risk was, well, will they can, would they continue to be seen as as key players? If the United States government was seen to be basically calling the shots? And the big tricky balance, I think, you know, those four and perhaps a few others, had to strike was, not only can we issue orders, but we will continue to be able to issue orders. Yes, with, of course, you know my oversight from the United States, but not so much that we still can’t make life difficult for you if you don’t follow what we say you need to do, right? Because ultimately, the major, in fact, the only leverage that those who are in power now in Venezuela have vis a vis the United States is stability, right? If they cannot ensure stability, social stability, some measure progress, which doesn’t have to be bought. If they can’t ensure that basic stability, then their utility for the United States evaporates, right? And so, you know, they have, they had to be able, from the United States to continue to exert some level of control. Last the entire, you know, population descend into chaos
Kaeden Thomas: Right, now let’s move on to Chavismo. It’s a term that’s been thrown around a lot with this, with this transition into the Delcy government, much of your academic work centers around this concept. Could you please provide us with a synopsis of what Chavismo, in essence, is?
Alejandro Velasco: At its most basic level, Chavismo as a political movement, is the political movement that was founded by the late President Hugo Chávez, who first entered the scene in Venezuela and political life in 1992 when he as a lieutenant colonel in the army, staged What was then an unsuccessful coup attempt against the government then in power, and that in turn, followed from a series of really major social and economic and political crises in Venezuela in the in the years prior to that coup attempt, he went to jail, was eventually pardoned, and then mounted a successful electoral movement based on the idea that the regimes that had ruled Venezuela, the democratic regimes that ruled in Venezuela between 1958 and eventually 1998 had become too corrupt, too insular, unresponsive to the needs of the population, and as a result, not only that, they need to be voted out of office, but the entire framework, constitutional framework, that they had developed over the prior years needed to be overturned. So that was his platform. His platform was what he called a Bolivarian revolution that would refound the Venezuelan Republic along different lines and had been in place before. Now, what those lines were remain very contentious, as well as as in this amorphous but especially in its outset, which is to say after he was elected in 1998 and when he took office in 1999 the the three primary pillars of what Chavismo was as a political movement centered around strong personalist appeal of Hugo Chávez as a charismatic leader, a strengthened executive branch, which is to say, you know, stemming from, you know, long standing authoritarian current within. Within Chávez himself, but then also an expanded citizenry, which is to say many provisions in the constitution that eventually was rewritten wholesale and then put into place into that in the year 2000 granted a lot of provisions for direct citizen participation in ways that have not been the case before. Right? So this triumvirate of personalist leadership, strengthened executive and expanded citizenry were the pillars of an early Chavismo. The manifestations of that had to do with controlling the oil company, which is all important in Venezuela oil its industry had been nationalized in 1976 then it was reprivatized to some extent in the 1990s and at a period when the oil prices were very low and Chávez understood that any potential for, you know, growth in Venezuela had to come hand in hand With higher oil prices. So that was one big measure of his earliest days in power, to try to rebuild the oil industry and rebuild state capacity as a result. But the other one was to eliminate, or at least to try to eliminate, corruption, which would become rampant in the in the 1980s and 1990s right? So broadly speaking, Chavismo is a kind of personalist political movement with no particular ideological rounding. And this is important because of course, later on, Chávez would imprint a strong ideological banner onto Chavismo as not about bolivarianism, but rather about socialism, what he called socialism. Of the 21st century, he would, of course, also begin to speak very loudly and impassioned ways against us, empire, the US government, right, which branded him as as an anti-imperial or anti-US, you know, figure, but those came later. And the reason why that’s important is because projecting backwards what came later often is a misleading historical move, because it suggests that things were always going to be a certain way, rather than being more more contingent. It also doesn’t make it easy for us to understand why. For instance, in over the last three months, we’ve seen such a dramatic shift in terms of tone as well as policy and the people who are in power, who were Chavistas, from going all the way back, and the way to understand that is as a social movement and a political movement, mostly now, political movement that is adaptable over time, that its primary feature is political survival, and in that way, it’s much more akin to political movements like Peronismo in Argentina than it is to say, You know, some rigid ideological political orientation.
Kaeden Thomas: So you say Hugo Chávez kind of molded the, you know, the term “Chavismo” into being somewhat of a socialist ideal. And why exactly did he do that?
Alejandro Velasco: It’s a great question. You know, I think part of it was the other major feature of what Chávez is political formation in his adolescence and then later in his his young adulthood, and eventually as a cadet in the army, and then later, as a young officer in the military, was informed by his older brother, Adán, who was a committed Marxist. And he, Adán Chávez, was was in close contact with a small, very inconsequential, you know, Marxist guerrilla movement in the 1970s in Venezuela. But as Chávez grew more and more disenchanted with what he saw in in the political in the political system, and as economic crisis really hit Venezuela, beginning the 1980s I think he was much more susceptible to the message coming from, you know, his brother and his brother’s friends than might otherwise have been the case. And so he had, you know, it’s not to say that he didn’t have a socialist kind of orientation or familiarity before, but it wasn’t paramount, certainly not as a political movement, I think he was much more inclined to seeing social justice, broadly speaking, rather than socialism as the primary aim of what a government’s responsibilities, especially to its neediest population, was, I think how and why he adapted that to. Initial formulation of state capacity, lower corruption, strengthened citizenry, expanded executive into a socialism of the 21st century, as he called it, was a combination of two things. One opportunity. Oil prices skyrocketed, beginning in 2003-04 which came hand in hand with his ability to control the oil industry. He wrested control from the opposition of the oil industry around 2003 and so that opportunity, you know, the financial one, because of the oil revenues coming in, but also the political and institutional one given his control over the the apparatus of the state, coincided with a larger vision for not only a national, but really a continental, a hemispheric shift toward the left. And so one of the things that we began to see in Latin America beginning around 2002-03 is one leftist president after another, elected with different variations of what leftism was going to mean, but really harkening back to a tradition very powerful in 20th century Latin America, of you know, some version of socialism, harder or softer-lined. And so I think that opportunity, combined with an historical drive really combined around 2004 2005 to reshape the orientation of Chavismo to being far more around socialism than what it had been before.
Kaeden Thomas: And so Chavismo at its essence, right? You describe it as something fluid in order to consolidate power in the executive office, right? How is Chavismo manifesting itself in politics post-Maduro?
Alejandro Velasco: Great question. The reality is very little other than this more abstract sense of adaptation. Right again, if we try to find a strong kind of ideological current within Chavismo, we’re going to be disappointed in what’s happening right now, because it’s hard to place, but it’s certainly the case that they’ll see Rodríguez seems, again, in very tentative ways, but in important ways, to be solidifying control around herself, right? She obviously, again, I have to stress, it’s only been three months since Jan. 3. But even so, we have seen some important moves to distance herself from the cadre of power that was around Maduro, and to refashion it, refashion it in her image. And so, for instance, we saw the destitution of upwards of, I think, 40 generals that had been appointed by Maduro from the military in the army. We saw, as just mentioned last week, the stepping down of the defense minister who had been Maduro defense minister for, you know, for over 10 years. But we’ve also seen some and we also saw the resignation of the attorney general, which was who was very closely tied to to Maduro. But we’ve also seen the appointment of some interesting figures, like, for instance, they might seem small relative to to their positions of power, but very mainline figures associated with the higher education university system that are linked, not explicitly with the opposition, but with not kind of an ideological Chavismo. We’ve seen this call for amnesty, as well as some opening up of spaces of protest and dissent that we hadn’t seen for years in Venezuela, right? So you know, what she might be trying to do is, on the one hand, say, “I’m going to increase control over the government,” but at the same time, try to loosen somewhat the core set of the Maduro years so that there’s more breathing room, and we’ll see how far we can take that.
Kaeden Thomas: This is just a follow up question. So do you think that the malleability of Chavismo within the Venezuelan government can ultimately end up in, you know, resulting in good ends?
Alejandro Velasco: Ooh, good question. So the answer is yes. In a piece that I wrote in 2022 — this was sort of my attempt at giving the broad sweep of Chávez and Chavismo, as well as modern Venezuelan history — you know, I ended that piece by saying that the protest cycle that we saw in Venezuela beginning around 2017 and really lasting up until around 2021 and Maduro’s ability at that time to quash his opponents and really consolidate control around himself, that that cycle had come to an end. And then the question was, in that context, are there opportunities for a democratic Chavismo to emerge? And you know what I said at the time was it’s not, it’s a non-zero chance, but it’s small, right? Many things have to happen in order for that to take place, including, for instance, the removal of Maduro, who was this kind of sticking point to any possibility. Of course, for some of the opposition, nothing is possible in terms of a transition to democracy if anyone associated with Chavismo upper echelons remain in power. But that is, I would submit to you, not only implausible practically, but it’s also self- defeating as a long term strategy, because again, what that would suggest is that there’s no space for Chavismo to operate as a political movement, when in fact it started as a political movement and will likely remain as a political movement, you know, going forward, much more reduced with less room to maneuver. But there has to be space, because the absence of those spaces for especially folks who felt themselves in the 1990s and prior outside of the political system that would give rise to Chávez. So the opposition wants to repeat the same mistakes that gave rise to Chávez. And of course, they’re going to, you know, isolate and excise, you know, Chavismo to great extent. But those same forces, I think, incentivize, especially in this moment, that’s Rodríguez and those around her, to pivot towards not the same kind of democratic experiments that we saw in the early days of the Chávez years, but towards new democratic experiments, right? And it’s not out of the realm of reason that they could. You know, it might look very similar to liberal democracy, but the idea that that Chávez, that Chavismo, is inherently incapable of that, I think, again, misses the important ways in which Chavismo is not tied to any particular archeology, and so therefore to discount it out of hand is, I really think, a kind of a fool’s errand.
Kaeden Thomas: Thank you for that. So again, shifting gears, it is known that that mass migration ensued following, you know, the the fall of oil prices in 2015, and high inflation rates in Venezuela. What effect has this had on on Venezuela, the population, politics, Madurismo, what have you …
Alejandro Velasco: For sure. I mean, it is completely transformed the sense of what Venezuela is and where and whom. I mean, the fact that a quarter of the country’s population, perhaps even more than that now lives abroad transforms not just a sense of what Venezuelan is, but it also transforms politics very profoundly. Because incentive structure — at least this is for you know, for those who are in positions of political leadership — the incentive structure of, say, an opposition movement whose base of operations is outside Venezuela is very different from the incentive structure of a political opposition who is based in Venezuela. For those who are outside Venezuela, of course, their primary aim is to return and to take power in an eventual return. And so in some ways, the questions of how that’s done is less important than that it is done right. And so that’s what we’ve seen, especially as the the dynamics of the opposition shifted from the domestic one to an expatriate one right around 2018. But for an opposition that’s internal to Venezuela, their logic, especially living under repressive regime and conditions, is well, we have to maneuver in the margins and also try to find and win spaces where they are available, rather than try to go for wholesale control over the state. And so the way that that manifests, of course, is in whether or not the opposition participates or doesn’t in elections at any level, not just presidential but mayors, aldermen, things like that. And so for those who are in Venezuela, the answer is yes, of course, we participate (or not). But we do participate because it’s part of the political terrain for those outside Venezuela, it’s to give credence or legitimacy to the government, right? And so that’s a major debate that that is occasioned by the nature of this migratory flow, but there’s many other ways in which it affects Venezuela both inside and out, obviously, in many countries throughout the Americas. And now, of course, the United States, there’s a very strong xenophobic rejection of Venezuelan migrants. In Chile there were violent protests against encampments of Venezuelan migrants, and [in] Brazil. We saw those as well in Ecuador and Peru. Not so much in the United States, but certainly in other places where their numbers are greater and they’re much more concentrated. And so that, of course, also changes the dynamic in terms of how Venezuela is viewed internationally, within the region or more broadly. And then there’s a question that I was alluding to at the very beginning, which is, well, it definitely changes the way that Venezuelans imagine themselves as Venezuelans, right? So I left Venezuela when I was 16 in the 1990s and of course, I’ve since returned as an academic to study Venezuela, and you know, so many friends and family. But that sense of always being of two places is really, it’s confounding to your sense of self, right? It’s not just a hyphenated identity. It’s an identity that never feels quite full in place where you are, but also when you return to Venezuela, also feels not quite full, because you’ve spent so much time abroad, and you may now have family abroad, etc, etc, right? So, you know, it definitely creates these fissures, which also provide for important moments, but they’re just moments of of a kind of unity. And of course, Venezuela just lived through one really dramatic one a couple of weeks ago, with the victory by Team Venezuela and the World Baseball Classic. And you know, baseball is such a massive sport in Venezuela, and the fact that it happened against the United States team in Miami was all the more dramatic. But one of the things that you know was really dramatic about that, beyond just all the context, is that I didn’t really see that it happened. I’m not suggesting that it didn’t, but in prior moments like that, we’ve seen a lot of over-politicization of those events, and we didn’t see that in this moment. It really felt like an opportunity for people from various different countries where Venezuelans are, from different political standings, to celebrate a shared victory. And that was a true moment of hope. But of course, that lays bare how polarized Venezuelan society has become.
Kaeden Thomas: And so this sort of leads right into my next question. You know, Maduro was happy to see, you know, the working class opposition leave the country right. You know those opposition groups of expatriates outside of the country, sort of having an inability to affect the politics within Venezuela and has the current administration expressed an interest in in the return of those, of those migrants to other places in South America, to the United States. Has there been sort of a change in rhetoric around that?
Alejandro Velasco: Not much. And we’ve also not yet seen the kind of predicted by some, anticipated by others, hope for, perhaps by many, mass return of migrants. There’s still too many questions and too much uncertainty about the future for those who made the tough decision, whether they were very working class or middle class. Or elite too, you know, those are difficult, really wrenching decisions. And once that decision is made, it’s not made halfheartedly, it’s made like, “Okay, we’re going to start a new life somewhere else.” And to the extent that you remain attached to Venezuela, it’s primarily through remittances and things of that nature. So we’ve not yet seen a kind of big move or a big plea from Venezuelan authorities for people to return. I think again, things seem uncertain, but you know, we may begin to see it if the economy improves. It’s not yet improved. Inflation is rising again. That has to do with some structural reasons, which are not the same ones that led to hyperinflation a few years back. And so that doesn’t, at least for now, seem to be on the table, but it does create a sense of uncertainty about return.
Kaeden Thomas: So in line with, you know, public political participation, I think it’s vital that we talk about collectivos, and in the past, they’ve been a hindrance to to public participation in Venezuelan government. Is there a continued existence of collectivos and and could you please provide an explanation for what exactly they are? But is there a continued existence of collectivos in Venezuela?
Alejandro Velasco: Yeah, no, for sure, collectivos continue to operate. So collectivos is a blanket term that started to be used in Venezuela around 2012-13, maybe a little bit earlier than that, to refer to armed groups of often very geographically-bound people whose origins vary wildly, but they exist essentially as paramilitaries. For some, they go all the way back to the 1970s or 1980s and they started as remnants of these guerrilla groups that I mentioned before. For others, they were like neighborhood associations. You know, informal neighborhoods. Neighbors would get together to try to fight crime, especially drug crime. And these are mostly popular sector communities, or we call them Venezuela Barrios. But for others, they started in the Chávez era. And for those, their attachment was less to a broad vision of “supporting my community” and really the permanence of power of Hugo Chávez. So they’re very closely tied to not only Chávez himself, but Chavismo more generally as a political project. And they derived a lot of benefits from Chavismo in terms of their proximity to the state and to its institutions. Those benefits were in terms of weapons, but also in terms of resources during the periods of economic crisis under Maduro, those resources were very closely tied to distribution of food products. They essentially served as distributors at the very local level, but they could enforce that distribution by threat of force, of course. But the other major way that they transitioned, especially under Maduro, is as kind of paramilitary shock troops to impose order where the police or the National Guard or the army would not get involved, right? And so the the use and deployment of collectivos really became a political tool especially directed towards popular sectors to keep discontent from popular bases at bay, and that those collectivos continue. They’ve not been dismantled in any real way, but they also are right now in a very precarious, in some ways vulnerable position, because they know that no one is going to come save them, certainly not the US government or the opposition if they start to rile up. And at the same time, as I talked about before, the primary leverage that the government in power has vis-a-vis the United States is to maintain stability. And so if collectivos, even if it’s some of them, start to make trouble for the government, they will very quickly be neutralized by the army or or the police, and no one’s going to come crying for them, right? And so they still exist, but they’re in a very precarious moment vis-a-vis their existence.
Kaeden Thomas: And this is a segue into, you know, the Trump administration has expressed in engaging with this conflict, they’ve expressed an interest in implementing, re-implementing and reintroducing privatized oil companies within Venezuela. How long will it take Venezuela to reap the benefits of this reintroduction?
Alejandro Velasco: Estimates vary wildly. I mean, some say that pending, of course, on the level of investment, which by some estimates approximating $200 billion it would take about 10 years for Venezuela’s oil industry to start pumping the levels that it used to pump before 2017 really, when production precipitously declined. And that would be basically around three, three and a half million barrels a day. And so by some estimates, it could take us as long as 10 years. But the reality is that, because Venezuela’s economy is so battered, it doesn’t actually take a tremendous amount for there to be some measure of recovery, in relative terms. And I’ll just give you an example. So one of the major things that has changed vis-a-vis the oil industry in Venezuela over the last three months is that, in this, of course, has become this has come about as an imposition by the United States, but a welcome one, I think, for the Venezuela government. Before Jan. 3, Venezuela was selling its oil at deeply discounted rates to countries like China, to India, Turkey and others. And by deeply discounted I’m talking about like, 30 cents to the dollar, right? And it was selling it at these very discounted rates because it had to go through this Dark Fleet around radars and transponders and things of the risk was high for the purchaser. And so Venezuela was assuming that risk by way of these discounts. And so the United States said, “Well, you’re not doing that anymore. You’re selling oil to us, not to China or Turkey or other places, and in addition, we’ll pay you the market price, so there’s no discount that’s coming your way that you have to exact.” So without changing the production levels at all, right, it’s still pumping about a million barrels a day already. That translates into a significant increase in revenues, right? So, you know, the recovery that may be possible doesn’t require tremendous amounts of investments in the industry itself. So that’s more of a long term issue. But even then, you don’t have to, unless your aim is 3 million barrels plus, and you could potentially do that more quickly than 10 years. In terms of recovery for Venezuela, it could be far more short term than than the investment suggests.
Kaeden Thomas: And there’s been hesitancy around us privatized oil companies in this reintroduction, right? Why exactly is that? Why are they so hesitant to return to Venezuela?
Alejandro Velasco: Well, they’ve been burned before. They want to make sure they’re not burned again. So the long history, the medium history of the oil industry in Venezuela, in a nutshell, is oil was nationalized in 1970s. That nationalization happened through a very careful process of indemnization of prior private oil companies that had done most of the work of building up the Venezuelan oil industry by way of drills as well as refineries. And these are companies like British Petroleum, Exxon Mobil, Esso and Shell, etc. That nationalization was therefore done in a very uncontentious way. When oil prices declined very rapidly in the 1980s and they bottomed out in the 1990s, it was not profitable to have a national oil industry, and so Venezuela was not able to keep up with its plans and visions that it had laid out in the 1976 period of oil boom, where anything was possible. And so it re-invited [the companies] — and the share was the same as had been before in 1976, 50/50, right? So you had 50%, or 60/40, breaking to private companies. In 2007 when oil prices again were very high and Chávez had secured control over the national oil industry, he passed a new hydrocarbons law, which then flipped the national revenue, the scheme that had been organized in the 1990s, 60/40, the opposite way, right? So now the government was going to keep 60% and the private companies are going to keep 40% and many private companies said, “No, we’re not willing to do that. You know, we just don’t want to do that. And it feels unfair. Feels, you know, too sudden, and you didn’t invite us in, as you did back in 1976,” and so they resisted that. And then Chávez just expropriated their properties, and then they litigated, and in many cases, the international courts, including some courts in the United States, ruled in favor of Venezuela, not in all, but in some cases. So there’s distrust, and there’s concern on the part of US and other oil companies that “Okay, fine, we’ll go back … But what’s there to prevent something like what happened in 2007 from happening again?” And of course, the Trump administration says, “Well, we’re here to prevent that. We’re not going to allow that to happen.” But who knows how long the Trump administration is going to be around and how long their policy vis-a-vis Venezuela will remain as it is? So I think that hesitation is historical in nature, but it’s also calculation about whether or not peak oil in the 21st century remains the primary tool for progress and development, or if alternative energies might be that possibility. So you know US oil companies are being asked to invest a lot of money in a future that is uncertain, not only in terms of its own industry, but also in terms of the stability of Venezuelan politics and the law.
Kaeden Thomas: Okay, you’re going to have to bear with me on this question, because it might be coming from a place of ignorance and speculation, but is nationalization of the oil industry inherent to corruption in Venezuela, because the timeframe in which that was implemented is when we — and, you know, correct me, if I’m wrong — we saw a turn towards stark authoritarianism. Is it inherent to corruption?
Alejandro Velasco: No, no, no, no, a national oil industry is not inherent to corruption. It’s the management of that oil industry that’s inherent to corruption. And so part of the problem of corruption, in fact, I would submit that one of the major problems of corruption is the lack of accountability. One of the things that happened during the nationalization of Venezuela’s oil industry in 1976 was that the new oil company PDVSA was really shielded from accountability. Quite literally, its headquarters in Caracas are a black cube — a “cubo negro,” right? And so the idea is that you can’t see inside it. You don’t know what’s going on. And people would call it negative as a black box. The metaphor worked in terms of showcasing the lack of transparency as well as the lack of accountability, and it was understood to act very autonomously from the state and its levers of power — for a good reason, the idea being that if there’s too much politics, or really any politics, involved in the oil industry, then politicians will be susceptible to just use the revenues coming from oil at at their disposal. And so there was this firewall created between the government and the oil industry, and the primary source of accountability for the oil industry was not the public, it was the international marketplace. So the incentive for PDVSA was to run like a well-functioning oil company, even though it’s not publicly traded. So that was the standard, but the lack of accountability also made it susceptible to corruption internally, because there’s not a lot of oversight that happens. What Chávez does in 2003 after he takes control over the old industry is he eliminates that firewall between the government and the oil industry, and the oil industry then becomes literally a piggy bank, a cash box for the government to do with it what it will. Now, again, I would say that that’s not inherently a source of corruption, but what is primarily a driver of corruption at the same time is that Chávez also came to control all the other institutions of the state by way of electoral boycott of the National Assembly in 2005, by way of the failed coup of the military in 2002, by way of this national oil industry strike in 2002-03 which gave him control over PDVSA and then allowed him to appoint people who were loyalists. And so there was no either internal or external body, just at the time when oil was flushing in massively as a result of the skyrocketing prices, to oversee the expenditure of this resource. So simultaneously, you could sustain tremendous amount of corruption — and also all the social programs that Chavez implemented, beginning in 2004-05 there was that much money coming in, like you could simultaneously siphon off millions of dollars from from the state coffers, and still provide to the population. But that all has to do with the lack of accountability, not the fact that it’s a national oil industry.
Kaeden Thomas: It is known that unwarranted engagement on foreign soil, particularly in Latin America, has ended poorly in the past — Chile with Pinochet, and Panama and Guatemala. Considering it has been a success thus far, and that’s on the short term, as you said earlier, what can we learn from this conflict? What is different?
Alejandro Velasco: Well, I should say I’m not sure if it’s been a success so far, but it has been different than, I think, what historical precedent has suggested. So the question of whether it’s been successful or not is very much up in the air. I will say that it’s been “successful” insofar as our worst predictions, which were about civil war or general chaos, have not come to pass as of yet. So in that sense, it absolutely has been successful. But I don’t want to be too ebullient about it, but your question is a really great one: what is the role or the echoes of history in Venezuela at this moment in Latin American history, or the history of US intervention? And you know, the reality is that we are seeing a different type of US intervention than we’ve seen in a very long time in Venezuela. So it’s not the kind of intervention that has boots on the ground. There does seem to be some resonance to say, gunboat diplomacy, where countries are forced to enact policies based on the threat of of intervention. And we certainly continue to have a big armada in the Caribbean. But it’s also one that, again, as I was talking about before, is being done with a government in power in Venezuela that is open to much of the changes that the United States has been asking for. And so there’s this kind of weird synergy between an interventionist appeal — not appeal, interventionist move — on the part of the United States that looks different from what it has been in the past, and a desire, not only for survival on the part of the authorities in Venezuela, but transformation from within. And so that coincidence is making what we’re seeing in Venezuela quite unique, that we’ve not seen in the past. So I don’t think — I mean, obviously attacking a country, invading its territory, extracting its leader, bringing that leader and his wife back to the United States to stand trial under US law, rather than international law, is … there’s no legal precedent for that. There’s no lawful argument that suggests that’s allowable. It’s just rule of force. That’s all there is to it. But within that, you know, what we’ve seen over the past three months does suggest, you know, a different form of intervention, right? One, that is intervening, not even based on a principle. Right here, the principle is not democracy. It’s some kind of stability, but stability for what purpose? You might say it’s so that the US can invest in the oil industry. But it’s not saying we’re going to take all all the oil … even though that was discursively, initially, what what Trump had said, it’s not actually what’s happening in practice. And so, you know, it’s a strange kind of collaborative intervention, if I could call it that, that we have not really seen in the past. And but again, it’s only been three months, and so who knows what could happen over the next three months, maybe even less.
Kaeden Thomas: Thank you for your knowledge, Professor. I really appreciate you coming on and joining with us today. I’d like to make a couple shout outs if you want to learn more: Alejandro Velasco joined the Search Engine podcast and created a two-part episode on Venezuelan history, which is super informative and can give you a bit of background to this podcast. And also, you wrote a book “Barrio rising: Urban Popular Politics in the Making of Modern Venezuela,” as I said earlier … could you give us a brief synopsis of that?
Alejandro Velasco: Thank you for that plug. The book traces 40 years in Venezuelan history before the rise of Hugo Chávez, and it looks particularly at one neighborhood in Caracas, which is a very famous neighborhood for what it is meant both symbolically and where it’s situated in the capital city over the course of 40 years in Venezuelan history. And there’s protest, there’s violence, there’s hope, there’s opportunity, there’s experiments in democracy, all of it leading to this very hybrid understanding — and much more expansive understanding of democratic politics than just limited to the ballot box. And so it’s a kind of, it’s an attempt to think about the origins of the Chávez era, but not as a teleological exercise, much more as an exercise than what couldn’t have been, rather than an exercise in what actually happened.
Kaeden Thomas: I appreciate it. Thank you for being on with us, Professor.
Alejandro Velasco: Thank you. I really appreciate it, Kaeden. Have a good one.
